Obama’s Defense Budget Priorities and Choices Partially Revealed

2/01/2012 – On January 26, the Pentagon released its “Defense Budget Priorities and Choices” document. This 15-page brochure, along with the budget briefings provided by Senior DoD officials that day and subsequently, provided some information on how the new Defense Strategic Guidance will affect the Department’s future military programs.
The choices in budget priorities, designed to meet the White House’s mandate to cut $37 billion from its previously planned Fiscal Year (FY) 2013 defense spending, generally conform with the new directions contained in the Guidance but leave several key questions unanswered.

The Department’s topline request for FY13 is $525 billion, down from an original $531 billion. The Pentagon requests an additional $88.4 billion for overseas contingency operations (OCO), mostly in Afghanistan, a major cut from the originally proposed $115 billion. The request aims to begin the process of reducing the defense budget by $259 billion during the next five years and $487 billion during the next decade.

Will the DOD budget cuts be strategy driven? (Credit Image: Bigstock)

The Department of Defense (DoD) will release more detailed budget information when President Barack Obama formally submits his proposed FY13 budget to Congress, which is scheduled to occur on February 13. SLD readers will hopefully find answers to some key questions when they appear:

• Do the Military Services retain their traditionally roughly equal proportion of the DoD budget—or do the shares of the Air Force and the Navy rise while that of the Army declines, as one would expect from the proposed Asia-Pacific pivot, where air and maritime power is most applicable given the large distances involved and the limited patience of Asian countries to host large numbers of U.S. ground troops.

• What is the proposed mix of the Active and Reserve Components—by Service and in the aggregate? In general, one would expect the Reserve Components to be spared major cuts since the Department describes them as essential for mitigating the risk of the large Active Components reductions by hedging against unanticipated threats. And the Air Force and the Navy, for the reasons described above, would likely keep essential activities in the more readily available Active Components.

• Which core category will receive the most severe cuts? Personnel costs makes up 1/3rd of the Pentagon’s budget, but the Department states that they will only take 1/9th of the total cuts, notwithstanding that the Army and Marines will decrease in size to 490,000 and 182,000 people, respectively.

• If personnel costs are shielded, than procurement will probably be cut most heavily since the Department briefers insist they will avoid a return to the “hollow” military of the 1970s by preserving readiness. But how does this square with the Pentagon’s general vision of substituting sophisticated military capabilities for military personnel?

• Which programs are best protected from the defense cuts or even given greater funding? The “Defense Budget Priorities and Choices” document states that, ”Meeting the requirements of the new strategic guidance entailed increasing funding for a few key capabilities while protecting others at existing levels or making comparatively modest reductions.” The document lists the following priorities:

o Counter-terrorism (which would include SOF, ISR, and UAV systems)

o Cyber operations (“cyber is one of the few areas in which we actually increased our investments, including in both defensive and offensive capabilities)

o Power projection (bombers and aircraft carriers)

o Space systems

o Counter WMD (increased funding against biological threats)

o Science and technology

We have learned that detailed military strategies are highly sensitive to even small changes in the defense budget as well as large transformations in the international security environment. The Defense Department has regularly had to discard a strategy within a year of issuing it.

This month’s strategy and budget briefers have stressed the connection between the Pentagon’s new strategy and the proposed resources and projects. They also insist that their force proposals constitute an integrated package and that changes in one element could cause the whole package to unravel.

But Congress is unlikely to simply adopt the proposed budget without changes. House Armed Services Committee Chairman Howard P. “Buck” McKeon released a statement on January 26 that criticized the Obama Administration’s new defensive strategy and military posture and warning that his committee “will continue and intensify our rigorous oversight, keeping in mind that while the President proposes, Congress disposes.” The Congress should probe the following issues during such hearings:

• What kinds of trade-offs will the Congress consider along the above lines (among the categories, Military Services, and AC/RC components)?

• The proposed budget does not offer any high-profile reductions, such as discarding an aircraft carrier. Is their absence because the Department is hording some bargaining chips to offer to Congress to avert deeper cuts or sequestration? What are these?

• The Obama administration has prided itself on its whole-of-government approach, as manifested among other things by its use of an integrated multi-agency national security budget. How do the proposed changes in the DoD budget relate to corresponding changes in the budgets of the State Department and the rest of the national security departments and agencies. For example, in Iraq, the State Department is supposed to receive a budget boost to compensate for the U.S. military withdrawal. Are such trade-offs evident elsewhere and will Congress honor them or cut all capabilities with equally destructive vigor?

• The Department’s funded programs aim primarily to help the Pentagon fight a high-technology war. These include the commitments to maintain the current bomber, aircraft carrier, and amphibious fleets. In addition, the Department will increase the cruise missile capacity of future Virginia-class submarines, design a conventional prompt strike option from submarines, and field improved air-to-air missiles. Finally, it will develop a new long-range strategic stealth bomber.

• Congress needs to probe whether this may be wishful thinking—an understandable desire to deemphasize counterinsurgencies and counterterrorism to refight the beloved Desert Storm Campaign. The Guidance explicitly says that the Department is not anticipating a large-scale long-term counterinsurgency, but how confident is the Pentagon of this assessment, and how well can the Department respond should one or two such contingencies arise: Two such conflicts occurred quiet recently in Afghanistan and Iraq, and the current strategic environment is ripe with failed states, civil wars, and other internal conflicts? Former Defense Secretary Robert Gates strove during his tenure to institutionalize irregular capabilities within the regular military to avert the post-Vietnam experience, when the Army readily unlearned how to fight guerrillas.

• More generally, the Department places great faith in its ability to “structure major adjustments in a way that best allows for their reversal or for regeneration of capabilities in the future if circumstances change.” How does the Department measure “reversibility” when it comes to recovering discarded or reduced capabilities? Has the Department actually assessed how long it would require to resume or accelerate key defense production lines or recall retired personnel to military service? What will happen over time as the weapons systems and veterans from the post-9/11 conflicts now leaving active service decline in number and effectiveness.

• The Department acknowledges that it will need to rely more on allies and partners to compensate for some of the proposed DoD cuts. Have U.S. government representatives engaged in extensive consultations to ensure that allies will retain or develop essential capabilities that will be reduced by the United States? Does the Department propose to increase funding for Global Train and Equip and other foreign military training programs so that allies and partners can compensate for reduced U.S. COIN and counterterrorist capabilities.

• In “Defense Budget Priorities and Choices” the Department confirms it has cut back on some ballistic missile defense (BMD) programs. DoD adds that, “Despite its importance, we were not able to protect all of the funding in this area. We protected investments in homeland defense and the Phased Adaptive Approach for missile defense in Europe aimed at protecting our allies. We reduced spending and accepted some risk in deployable regional missile defense and will increase reliance on allies and partners in the future.” But how convinced is the Department that U.S. allies in the Persian Gulf and especially the Pacific will compensate through their own redoubled BMD efforts (either by purchasing their own BMD systems or by developing their own) and will use their capabilities to defend U.S. forces even when they have not been directly threatened.

There are also several longer-term questions whose answers will only become clear several years from now:

• The Department seems to place excessive faith in their ability to save money through “efficiencies.” Notwithstanding having already identified more than $150 billion in savings over the FY 13-17 period, the Pentagon now claims to have discovered another $60 billion “efficiencies and overhead savings” during those five years. Examples include:

o More skillful contracting practices

o Better use of information technology

o Better use of business and enterprise systems

o Streamlined staff

o Limitations on official travel

o Better inventory management

o Reductions in contract services

o Deferral of some military construction

o Reductions in planned civilian pay raises

• Given that the previous practice of pledging to eliminate “waste, fraud, and abuse” never worked out, are these alleged savings credible, realizable, and wise?

• Is the Defense Department serious about launching a new round of base closures? First, this is an election year, so Congress will likely resist any base closures in their districts. Second, the Base Realignment and Closure (BRAC) process normally entails some up-front costs before realizing any savings. The proposed BRAC might simply be just part of the bargaining process.

• The Department clearly does not want to undergo a sequestration. The briefers repeatedly warn about the enormous damage such large and arbitrary cuts will make to the DoD budget. But someone in the Department has to (or should) be preparing for such a possibility. What would a sequestered budget really look like?

• The Department proposes creating a commission with “BRAC-like” authority to consider cuts in military retirement benefits and propose a package of changes that Congress must accept or reject in their entirety. But the Congress should press the Department to conduct a more extensive review of all the military benefits that might influence military recruiting and retention. It is possible that service members do not value some expensive benefits that highly; these should be discarded since, according to Defense Secretary Leon Panetta, the Department’s personnel costs have almost doubled during the last decade.

The Pentagon plans to maintain strong funding support for unmanned assets and Special Forces in coming years even while spending on more conventional forces will grow slower and in some cases even fall. The Obama administration has invested heavily in unmanned vehicles—air, land, and sea—and has conducted many more drone strikes in Pakistan, Yemen, and elsewhere than its predecessors. More visibly, the administration has sent the Special Operations Forces (SOF) to free hostages, kill terrorists, and perform other important missions. Rather than Colin Powell-type overwhelming force missions, the Obama team is partial to the deft and swift surgical strikes conducted by missile-armed drones and helicopter-transported commandos.